Clean Marine one fuel, all sources, all 1me! Tuzla 22.03.2017 Jan Fredrik Gulbrandsen
Back ground MEPC 70 October 2016 Fuel availability study Conducted for IMO by CE Del4. Approved by IMO. 2020 ra<fied by MEPC70 Conclusion: Enough compliant fuel for 2020 but: To supply the world fleet Alterna<ve fuels such as LNG must take up some of the volum Abatement technology must absorbe a given quan<ty of high sulphur HFO The prac<cal outcome of MEPC70 decission of world wide 0,5% sulphur cap: High demand for MGO, MDO and LSHFO High investments needed at refineries to produce Higher costs for compliant fuels (investments, energy needed, more crude needed) Possibly lower availability of compliant fuels Lower demand for high sulphur HFO Lower cost than today for HFO (lower demand, s<ll much residue) 2
Trends in the tanker market Oil Companies and tanker owners BP: - 2 vessels from own fleet installed scrubbers. - 01.01.2017: started surveys for retrofixng exis<ng vessels - 15.01.2017: Requires assessment for scrubbers to be installed for new builds to be chartered Total: - Scrubbers to be installed on Viken vessels to be build in Korea - 01.02.2017: Agreement with CMA-CGM to install scrubbers and Dual Fuel engines Shell - Pushing for LNG but for vessels not fit scrubbers will be evaluated All figures and tables from: Statoil - 6 vessels on long TC with scrubbers - 15.01.2017: Requires scrubbers to be installed for new builds to be chartered NIOC - Study of scrubbers for NITC large new building program KPC - KOTC looking at scrubbers for new builds and possible retrofits on exis<ng fleet ARAMCO - Bahri looking at retrofixng exis<ng fleet 3
Fuel oil availability Oil companies have several intensives to push for scrubbers: - The need to upgrade refineries to meet low Sulphur fuels will result in high cost investments - Many refineries will not do necessary investments - There will always be residues (unless perfect coking) a4er refining and supplying HS HFO to vessels with scrubbers will take off some of this surplus - Use of high Sulphur HFO will decrease cost of running chartered vessels/owned vessels 4
Forecast delta cost LS fuels/hs HFO Forecast price marine fuels varies: - Price MGO will very likely increase due to higher demand, higher produc<on cost (investments in refineries and more crude needed to produce sufficient volumes) and transport costs. - Price LS HFO will be somewhat less costly than MGO but as a lot will be blending of MGO and HFO it will follow MGO price. Predicted to be 50-100 USD/t less than MGO - Price high Sulphur HFO will decrease due to low demand. - The highest gap between MGO/LSHFO and HS HFO is predicted to be from late 2019 to 2023? - Price gap between MGO and HS HFO is probably going to be between 350 to 550 USD/ton. Historically we have seen higher deltas. 5
The business case for installing an EGCS Op<ons for compliance with regula<ons: 1. Switch to dis<llate (MGO) pay the extra fuel bill 2. Install EGCS con<nue opera<on on HFO 3. Switch to other fuel types LNG, Op<mal choice depend on: 1. How much the vessel will be trading in ECA / Global trade ) 2. The power (MW) and fuel consump<on of the vessel 3. Assumed price difference between MGO / MDO and HFO Payback (years) 10 9 8 7 6 5 4 3 2 1 Price diff > 350 Price diff. < 350 20% 40% 60% 80% 100% ECA% 6
Various EGCS technology Sea water scrubbers. 1-2 types of exhaust sources per unit: Main Engine and/or AUX or boiler. *for 0,1% ECA Sea water scrubber with* alkali boost. All exhaust sources in one unit. Main Engine and AUX and boilers. 7
Various EGCS technology Type of EGCS Advantage Disadvantage All Stream Hybrid One fuel in all waters. High ROI Higher Capex All Stream Open Loop One fuel in most waters. High ROI. Slightly higher CAPEX. Fuel switch in ports with discharge regula<ons. Mul< Stream Hybrid Lower CAPEX if boiler is not included. Higher CAPEX if boiler is included. Lower savings if boiler is not included. Mul< Stream Open Loop Lower CAPEX if boiler is not included. Higher CAPEX if boiler is included. Lower savings if boiler is not included. Fuel switch in ports with discharge regula<ons. Single Stream Hybrid Lower CAPEX per exhaust source. Higher CAPEX if several exhaust sources is included. Lower savings if several exhaust sources is not included. Single Stream Open Loop Lower CAPEX per exhaust source. Higher CAPEX if several exhaust sources is included. Lower savings if several exhaust sources is not included. Fuel switch in ports with discharge regula<ons. All of above in 0,5% sulphur only Very low CAPEX Fuel switch in all ECA. Lower savings on all sources included. 8
Es1mated average total fuel consump1ons per 5 years for key tanker segments (based on rough es1mates from AET, Stolt Tankers & BP Shipping) 9
Es1mated average boiler consump1ons per year for key tanker segments (based on rough es1mates from AET, Stolt Tankers & BP Shipping) 10
In essence No one-size-fits-all solu1on Inves<gate what solu<on is right for each project - Vessel type - Vessel age - Trade parern - Fuel consup<on - Future regula<ons LPG, MGO, MGO/LSHFO Scrubber - Exhaust sources to be scrubbed: Main Engines, AUX, Boilers 11
Thank you!